New Waverly is thirteen miles south of Huntsville on State Highway 75 and Interstate Highway 45 in southern Walker County. It was founded by the Houston and Great Northern Railroad Company after the residents of what became Old Waverly refused to grant the railroad a right-of-way through their community. In 1870 the company laid its tracks ten miles west of Old Waverly and set aside a townsite known as Waverly Station. The new community attracted many residents of Old Waverly, and the new town's name was soon changed to New Waverly. The local economy was based on cotton, and Polish immigrants recruited from Europe between 1870 and 1902 supplied local landlords with tenants for their land. Apost office opened at the community in 1873. The new town grew rapidly, and in 1884 New Waverly had a population of 150 and seven general stores, four steam sawmills, two cotton gins, two saloons, and a gristmill. The community continued to grow, adding a boardinghouse, a restaurant, another gristmill, and two doctors by 1892, and a lumber company by 1896, when New Waverly reported a population of 250.
By 1914 the town shipped agricultural products and lumber and had a population of 500, a bank, a telephone company, a hotel, and a newspaper, the New Waverly Post. The community established Baptist, Methodist, Presbyterian, and Catholic churches. A local school was consolidated with nearby Elmira and other schools to form the New Waverly Independent School District. In 1952 New Waverly incorporated as a general-law city, and in 1949 it had a post office, a bank, eighteen other businesses, and a population of 410. In 1964 the town's population increased to 620, and the number of businesses decreased to fourteen. In 1982 New Waverly had a population of 824 and thirty-three businesses, and in 1990 it reported a population of 936. Around that time the largest employer in the vicinity was Louisiana-Pacific, a large lumber-manufacturing company in adjacent old Elmira.